Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed July 30, 2004
Division No. 94-1
IN RE: MADISON GUARANTY SAVINGS & LOAN
(WATKINS FEE APPLICATION)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, As Amended
–————
Before: SENTELLE, Presiding, FAY and REAVLEY, Senior
Circuit Judges.
ORDER
This matter coming to be heard and being heard before the
Special Division of the Court upon the application of William
David Watkins for reimbursement of attorneys’ fees and costs
pursuant to section 593(f) of the Ethics in Government Act of
1978, as amended, 28 U.S.C. § 591 et seq. (2000), and it
appearing to the Court for the reasons set forth more fully in
the opinion filed contemporaneously herewith, that the peti-
tion is not well taken, it is hereby
ORDERED, ADJUDGED, and DECREED that the peti-
tion of William David Watkins for attorneys’ fees that he
2
incurred during the Independent Counsel’s investigation be
denied, save for a single unique item.
PER CURIAM
For the Court:
Mark J. Langer, Clerk
By:
Marilyn R. Sargent, Chief Deputy Clerk
Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed July 30, 2004
Division No. 94-1
IN RE: MADISON GUARANTY SAVINGS & LOAN
(WATKINS FEE APPLICATION)
Division for the Purpose of
Appointing Independent Counsels
Ethics in Government Act of 1978, As Amended
–————
Before: SENTELLE, Presiding, FAY and REAVLEY, Senior
Circuit Judges.
ON APPLICATION FOR ATTORNEYS’ FEES
Opinion for the Special Court filed PER CURIAM.
PER CURIAM: William David Watkins petitions this Court
under section 593(f) of the Ethics in Government Act of 1978,
as amended, 28 U.S.C. §§ 591–599 (2000) (‘‘the Act’’), for
reimbursement of attorneys’ fees in the amount of $129,583.10
that he claims were incurred during and as a result of the
investigation conducted by Independent Counsel. Because
we conclude that Watkins has not carried his burden of
showing that the fees would not have been incurred ‘‘but for’’
the requirements of the Act, we deny the petition, save for a
single unique item.
2
Background
In May of 1993, William David Watkins (‘‘Watkins’’), who
was Assistant to the President for Management and Adminis-
tration, fired seven employees of the White House Travel
Office. Because of allegations of wrongdoing surrounding the
firings, various entities, including the Congress and the Gen-
eral Accounting Office (‘‘GAO’’), undertook investigations of
the matter. Then First Lady, Hillary Rodham Clinton
(‘‘Clinton’’), was reportedly questioned during these investiga-
tions concerning her role in the firings. She asserted that
she had little if any involvement in them. When questioned
by the GAO, Watkins also stated that Clinton was minimally
involved. These statements were put into doubt when drafts
of a 1993 memo, written by Watkins and arguably contradict-
ing his and Clinton’s testimony, were produced by the White
House. The GAO subsequently filed a criminal referral with
the Department of Justice (‘‘DOJ’’), suggesting that Watkins
may have made false statements when interviewed by the
GAO. Because Watkins was a covered person under the
Independent Counsel Act, see 28 U.S.C. § 591(b), the Attor-
ney General (‘‘AG’’) initiated a preliminary investigation pur-
suant to 28 U.S.C. § 592, in order to determine whether
further investigation was warranted. Although the usual
duration for a preliminary investigation is 90 days, the AG
took considerably less time in this case1, concluding rather
quickly that further investigation was indeed warranted.
Consequently, she requested that this Court expand the
Independent Counsel’s (‘‘IC’’ or ‘‘OIC’’) jurisdiction to investi-
gate, among other things, whether Watkins or Clinton had
1 According to Watkins, the DOJ received the referral from the
GAO on March 1, 1996, and ‘‘[l]ess than three weeks later,’’ on
March 20th, the AG petitioned the Court to expand the IC’s
jurisdiction. App. at 9–10. The DOJ puts forth a somewhat
different time frame, stating that the GAO ‘‘submitted’’ its referral
on February 13th, so that ‘‘over one month passed’’ before the AG
filed her application on March 20th. In any event, it appears that
the preliminary investigation took approximately one month, give or
take a week.
3
made false statements to the GAO regarding the Travel
Office firings.
The IC then conducted an extensive investigation. Ulti-
mately, he determined that no charges would be brought
against either Watkins or Clinton. Pursuant to § 593(f)(1) of
the Act, Watkins now petitions the Court for reimbursement
of the attorneys’ fees in the amount of $129,583.10 that he
claims were incurred in defense of the IC’s investigation. As
directed by section 593(f)(2) of the Act, we forwarded copies
of Watkins’ fee petition to the AG and the IC and requested
written evaluations of the petition. The Court expresses its
appreciation to the IC and the AG for submitting these
evaluations, which we have given due consideration in arriv-
ing at the decision announced herein.
Discussion
The Independent Counsel statute provides:
Upon the request of an individual who is the subject of
an investigation conducted by an independent counsel
pursuant to this chapter, the division of the court may, if
no indictment is brought against such individual pursuant
to that investigation, award reimbursement for those
reasonable attorneys’ fees incurred by that individual
during that investigation which would not have been
incurred but for the requirements of this chapter.
28 U.S.C. § 593(f)(1). Accordingly, in order to obtain an
attorneys’ fees award under the statute, a petitioner must
show that all of the following requirements are met: (1) the
petitioner is a ‘‘subject’’ of the investigation, (2) the fees were
incurred ‘‘during’’ the investigation, (3) the fees would not
have been incurred ‘‘but for’’ the requirements of the Act, and
(4) the fees are ‘‘reasonable.’’ See In re North (Dutton Fee
Application), 11 F.3d 1075, 1077–82 (D.C. Cir., Spec. Div.,
1993) (per curiam). The petitioner ‘‘bears the burden of
establishing all elements of his entitlement.’’ In re North
(Reagan Fee Application), 94 F.3d 685, 690 (D.C. Cir., Spec.
Div., 1996) (per curiam).
4
The only significant dispute among the parties is whether
or not Watkins has met the ‘‘but for’’ requirement.
* * * * * * * *
Watkins argues that he fulfills the ‘‘but for’’ element under
three circumstances previously recognized by this Court.
The first circumstance, he states, is ‘‘when the requirements
of the Act interfere with the Justice Department’s capability
to conduct an adequate preliminary investigation.’’ This oc-
curred, according to Watkins, when the AG conducted the
abbreviated preliminary investigation, and is explained in the
AG’s Application to the Court:
[The Independent Counsel’s] ongoing investigation also
counsels against the Department of Justice conducting
any further preliminary investigation of the allegations
contained in the GAO referral on Watkins. Any such
investigation could, in my judgment, seriously interfere
with the Independent Counsel’s ongoing investigation,
and could compromise the Independent Counsel’s further
ability to investigateTTTT
AG Application to the Court, at 3. Watkins claims that as the
preliminary investigation here was not of the usual duration,
he did not receive its ‘‘benefit,’’ in that a ‘‘proper preliminary
investigation’’ would have led the DOJ, after reviewing the
evidence and reports generated by the various prior investi-
gations, to conclude ‘‘that ‘reasonable grounds’ did not exist
and [the DOJ] would have quickly terminated the inquiry into
the allegations against [him].’’ For authority, Watkins cites
In re Donovan, 877 F.2d 982, 990 (D.C. Cir., Spec. Div., 1989),
in which the ‘‘but for’’ requirement was found to be satisfied
because a proper Department of Justice investigation would
have revealed that there was no credible evidence against the
applicant, and In re Meese, 907 F.2d 1192, 1197–99 (D.C. Cir.,
Spec. Div., 1990), in which the ‘‘but for’’ requirement was also
found to be satisfied because the OIC investigation began
without a proper preliminary investigation by the Attorney
General.
5
Watkins’ second circumstance for passing the ‘‘but for’’ test
is ‘‘if the OIC’s investigation substantially duplicates prior
investigations.’’ He notes that preceding the IC’s investiga-
tion various entities, including the Congress, the DOJ, the
GAO, and others, had also investigated the matter, and that
therefore the IC’s investigation ‘‘substantially duplicated pre-
vious investigations into the Travel Office dismissals.’’ This
‘‘massive duplication’’ satisfies the ‘‘but for’’ test, according to
Watkins.
Watkins’ final circumstance is when the petitioner is sub-
jected ‘‘to a more rigorous application of the criminal law than
is applied to other citizens.’’ In re Donovan, 877 F.2d at 989–
90. He argues that he was investigated, and investigated
extensively, ‘‘[b]ecause of his senior position in the White
House, and his long-standing relationship with the Clintons,’’
and that ‘‘an ordinary citizen would never have been subject-
ed to’’ such an investigation.
In response to these arguments, the IC in her evaluation
reiterates what was known of the matter at the time, i.e., that
both Watkins and Clinton had testified that Clinton’s role in
the firings was minimal, but that drafts of a memo had
indicated otherwise. In light of this information, the IC
contends that ‘‘[t]he Attorney General, in the limited investi-
gation permitted her under the statute, could not have con-
cluded that there were no grounds to believe that further
investigation was warranted.’’ The IC also contends that the
serious allegations present here, involving possible perjury in
the grand jury and a failure to produce subpoenaed docu-
ments, would have been investigated by a law enforcement
agency even in the absence of the Act. The IC further
argues that the OIC’s investigation was not duplicative of the
earlier investigations of the matter because ‘‘the Independent
Counsel did not investigate the firings, except to the extent
necessary to determine whether Watkins or the First Lady
had made false statements.’’
The AG in his evaluation argues that Watkins fits none of
the three circumstances he relies on. First, the AG disputes
Watkins’ claim that a full-length preliminary investigation
6
would have led to a termination of the inquiry, arguing that
‘‘a more extensive preliminary investigation was unnecessary’’
in light of the allegations being made at the time, i.e., that
various statements made by Watkins to federal officials ap-
peared to be less than truthful. The AG further argues that
this case is not comparable to Meese or Donovan, the cases
upon which Watkins relies. In Meese, the DOJ notes that the
investigation by an independent counsel was requested based
upon factors other than evidence of a crime, 907 F.2d at 1196–
1201; whereas the situation here involved evidence of possible
criminal conduct. And in Donovan, determining the credibili-
ty of witnesses was necessary to determine whether further
investigation was warranted, and the Act hampered the
DOJ’s ability to make such a determination, 877 F.2d at 988–
89; whereas the AG states that ‘‘the allegation here con-
cerned an inconsistency in Mr. Watkins’ own statements,’’ and
resolving this inconsistency did not involve the credibility
determination required in Donovan.
Second, the AG disputes Watkins’ argument that the ‘‘but
for’’ element is satisfied because the IC’s investigation dupli-
cated prior investigations, noting that the Court has made
clear that the only prior investigation to which this duplica-
tion applies is the DOJ’s preliminary investigation. Accord-
ing to the AG, Watkins makes no claim to such a duplication.
Third, the AG takes issue with Watkins’ ‘‘private citizen’’
argument, asserting that the test is not whether Watkins
would have been investigated by a regular prosecutor’s office
if he had been a private citizen, but ‘‘whether the Department
of Justice would have looked into the matter if the allegations
were made in the context of a senior White House official
with frequent contact with the President and First Lady.’’
Finally, the AG, like the IC, argues that this matter would
have been investigated even without the Independent Counsel
statute, noting that the allegations of false statements to
federal entities, including the Congress and the GAO, ‘‘are
clearly the sort of matters that would be investigated in the
normal course by the Department of Justice.’’
7
We agree with the IC and the AG that Watkins fails the
‘‘but for’’ test and is therefore not entitled to fee reimburse-
ment. His argument that he fulfills the ‘‘but for’’ test be-
cause the IC’s investigation duplicated prior inquiries is not
supported by our prior decisions. Although we have in the
past awarded fees when the independent counsel’s investiga-
tion constituted a substantial duplication of the preliminary
investigation of the DOJ, see In re Olson (Olson Fee Applica-
tion), 884 F.2d 1415, 1420 (D.C. Cir., Spec. Div., 1989) (per
curiam) (IC’s investigation ‘‘necessarily duplicated ground
that had been covered by the preliminary investigation of the
Department of Justice’’); In re Olson (Perry Fee Applica-
tion), 892 F.2d 1073, 1074 (D.C. Cir., Spec. Div., 1990) (fee
applicant ‘‘was being subjected to expenses for a duplicative
investigation that he would not have been subjected to in the
absence of the Ethics in Government Act’’), we have specifi-
cally held that it is only duplication of the preliminary investi-
gation by the DOJ that merits fee reimbursement, and dupli-
cation by the IC of other investigations is not sufficient. In
re Pierce (Sanders Fee Application), 198 F.3d 899, 904 (D.C.
Cir., Spec. Div., 1999) (per curiam); In re Pierce (Seligman
Fee Application), 201 F.3d 473, 476 (D.C. Cir., Spec. Div.,
2000) (per curiam). As the DOJ points out, Watkins makes no
claim to any such duplication.
Watkins’ further argument that he passes the ‘‘but for’’ test
because an ordinary citizen would never have been subjected
to an investigation such as he was is also without merit. In
In re Madison Guaranty Savings & Loan (Clinton Fee
Application), 334 F.3d 1119, 1126 (D.C. Cir., Spec. Div., 2003)
(per curiam), we rejected a similar argument, noting that the
test is not what would have happened if the fee petitioners
‘‘were private citizens, but rather what would have happened
if there had been no independent counsel statute.’’ And as
both the IC and the DOJ point out, the allegations here of
false statements to federal entities and the failure to produce
subpoenaed documents would have been investigated with or
without the Independent Counsel statute.
Watkins’ final, and strongest, argument for satisfying the
‘‘but for’’ test is the AG’s decision to cut short the preliminary
8
investigation. We have recently had occasion to consider a
similar argument involving a similar situation. In In re
Madison Guaranty Savings & Loan (Marceca Fee Applica-
tion), 366 F.3d 922 (D.C. Cir., Spec. Div., 2004), the AG
conducted a preliminary investigation of only two days dura-
tion before requesting that the Court refer the matter to the
IC. The fee applicant argued that a full preliminary investi-
gation would not have led to any further investigation of him
by the independent counsel. We agreed, noting that a pre-
liminary investigation of the usual length would in all proba-
bility have exonerated the fee applicant. Id. at 927. In the
case before us, however, the AG curtailed the preliminary
investigation after a month so as not to interfere with the
IC’s ongoing investigation. It is doubtful, given the nature
and seriousness of the allegations involved, that a full term
preliminary investigation would have led to any less of an
investigation than was ultimately conducted.
Watkins therefore has not passed the ‘‘but for’’ test and is
not eligible for reimbursement of fees incurred during the
IC’s investigation. He is eligible, however, for reimburse-
ment of fees incurred for reviewing and replying to the IC’s
Final Report. Section 594 of the Act imposes the require-
ment that the IC ‘‘file a final report with the division of the
court, setting forth fully and completely the description of the
work of the Independent CounselTTTT’’ 28 U.S.C.
§ 594(h)(1)(B). Outside the requirements of the Act, federal
‘‘prosecutors do not issue reports.’’ In re North, 16 F.3d
1234, 1238 (D.C. Cir., Spec. Div., 1994). ‘‘Indeed TTT the
filing of reports by Independent Counsels is a complete
departure from the authority of a United States Attorney and
is contrary to the practice in federal Grand Jury investiga-
tions.’’ In re Madison Guaranty Savings & Loan (Clinton
Fee Application), 334 F.3d at 1127 (internal quotation marks
and citations omitted). Therefore, we do hold that this is a
fee which would not have been incurred but for the require-
ments of the Act. Watkins incurred these fees in the amount
of $7,517.75. These fees are reasonable and therefore will be
reimbursed.
9
Conclusion
For the reasons set forth above, we allow the petition for
fees of William David Watkins only to the extent of $7,517.75.
Except as herein specifically allowed, the petition is denied.